More than a few people look at the volume of electronic gadgetry that U.S. retailers import from China and assume that the Asian superpower’s strength lies in technology. In reality, China’s trade advantage comes from its ability to manufacture the goods less expensively.
Chinese Chip Technology
When it comes to research, development and implementation of chip technology, the Chinese remain net importers of semiconductors. In fact, they spend more on importing semiconductor chips from a silicon wafer manufacturer than they do on foreign oil.
Those semiconductors are the brains behind everything from tiny memory sticks to giant flat-screen televisions and automobiles, and they double in computing power every two years. That makes it even more challenging for China to become self-sufficient.
China introduced an initiative in 2015 aimed at achieving 40 percent self-sufficiency in semiconductors by 2020 but has lagged far behind the goal, prompting the recent creation of a $30 billion semiconductor fund. That’s an enormous commitment to become a major silicon wafer manufacturer considering that the world market for the product only crossed the $10 billion barrier for the first time in 2018.
What’s Behind China’s Push?
China’s push is inspired by the fact that a silicon wafer manufacturer producing a finished printed wafer may charge up to 100 times the cost of the unpolished, blank wafer. That means up to $50,000 for the most complex circuitry designs (“microlithography”) and makes for a nice return on investment from silica sand.
Silicon ingots require between a week and a month to grow after the raw silicon is taken to its melting point and seeded with a silicon crystal. As the seed crystal is slowly pulled upward, silicon atoms deposit on the bottom surface to extend the lattice that ultimately hosts the circuitry.
The loaf is then sliced into wafers less than a millimeter thick and polished in a clean room. From there, circuit patterns are printed onto the surface. Following final testing, the wafer is cut into tiny rectangles to separate copies of the chip.